“The stalled budget reconciliation bill replaces the Additional Child Tax Credit (ACTC), which paid cash to low-income workers with children, with a program that is part of the enhanced Child Tax Credit (CTC),” according to Steven Camarota, director of research for the Center for Immigration Studies (CIS), in the analysis.
“As was true of the old ACTC, any illegal immigrant with a U.S.-born child is eligible for the new program. We estimate that illegal immigrants will receive $8.2 billion in payments from the new program annually—more than triple what they were eligible for under the old ACTC—while legal immigrants will receive $17.2 billion. The 10-year cost just for illegal immigrants would total roughly $80 billion,” Camarota estimates.
Biden said in March when Congress approved his $1.9 trillion stimulus program that established the CTC that he wanted to make it permanent, but it wasn’t clear then that legal and illegal immigrants with children born in the United States would be added to those eligible for the credit.
The mammoth reconciliation plan now before Congress retains the CTC as approved earlier this year, but expands its availability and makes it a permanent entitlement.
“The maximum cash payment under the new program for those without federal income tax liability is the same as the reduction in tax liability—$3,600 for children under age six and $3,000 for children 6 to 17,” Camarota writes.
“The Congressional Budget Office has estimated the new cash grants, excluding the refunds, will cost the federal treasury $66.2 billion above the $28.9 billion that the old grants cost, for a total cost of about $95 billion annually.”
If it becomes law, the new CTC doubles the “refundable credit” per child, which, Camarota describes as “potentially revolutionary because the payments are so large that proponents hope it will substantially reduce child poverty.” The credit is deducted from a family’s taxes due, or paid in cash to those who have no federal tax liability.
Camarota calculated the average benefit likely to be available under the CTC if it’s approved by Congress and signed into law by Biden. Illegal immigrants would receive $5,134, compared to $4,757 for legal immigrants and $4,557 for regular citizens.
Camarota additionally points out in his analysis that by dropping any work requirement as a condition of receiving the credit, the CTC effectively repeals a key tenet of the landmark 1996 welfare reform approved by a Republican Congress and President Bill Clinton, a Democrat. That reform also linked the amount of assistance an individual could receive to how much they earned working.
“For low-income people, the link to earnings in the old program meant that the more someone earned, the larger the payment they received from the program, at least up to a point,” Camarota said of the previous program.
“The new program has no such incentive, as the full value of the cash benefit is available to any low-income person with a child, including those who do not work at all, making it like traditional cash welfare.
“The new cash grants from the CTC are paid in monthly installments that total half of what the beneficiary can expect to receive from the program once they file their taxes. This, too, makes it even more like traditional cash welfare, as beneficiaries do not have to wait until they file their taxes to get a check each month.”
The only other requirement besides having a child born in the United States is for the dependent to have a valid Social Security number (SSN). That requirement isn’t significant, however, because all persons born in the United States are automatically eligible to receive a SSN.
But Camarota adds that “the parent does not need a valid SSN. This means that anyone—legal permanent residents, long-term temporary visitors (e.g., guestworkers and foreign students), and illegal immigrants who have at least one U.S.-born child—can receive cash payments from the program if their income is low enough.”
